Page:United States Statutes at Large Volume 100 Part 3.djvu/835

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2643

T.

the amount which, but for such sale or disposition, would at the time of such sale or disposition— "(i) be paid to the United States, or, "(ii) in the case of a qualified mortgage bond or a qualified veterans' mortgage bond, be paid or credited mortgagors under section 143(g)(3)(A).

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"(F) EXCEPTION FOR GOVERNMENTAL USE BONDS AND QUALIFIED 501(CX3) BONDS.—This paragraph shall not apply to

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any bond which is not a private activity bond or which is a qualified 501(c)(3) bond.

"(e)

MINOR PORTION MAY BE INVESTED IN HIGHER YIELDING

INVESTMENTS.—Notwithstanding subsections (a), (c), and (d), a bond issued as part of an issue shall not be treated as an arbitrage bond solely by reason of the fact that an amount of the proceeds of such issue (in addition to the amounts under subsections (c) and (d)) is invested in higher yielding investments if such amount does not exceed the lesser of— "(1)5 percent of the proceeds of the issue, or "(2) $100,000. "(f) REQUIRED REBATE TO THE UNITED STATES.—

"(1) IN GENERAL.—A bond which is part of an issue shall be treated as an arbitrage bond if the requirements of paragraphs (2) and (3) are not met with respect to such issue. The preceding sentence shall not apply to any qualified mortgage bond or qualified veterans' mortgage bond. "(2) REBATE TO UNITED STATES.—An issue shall be treated as meeting the requirements of this paragraph only if an amount equal to the sum of— ai. "(A) the excess of— "(i) the amount earned on all nonpurpose investments (other than investments attributable to an excess described in this subparagraph), over "(ii) the amount which would have been earned if such nonpurpose investments were invested at a rate equal to the yield on the issue, plus "(B) any income attributable to the excess described in subparagraph (A), is paid to the United States by the issuer in accordance with the requirements of paragraph (3). ^ "(3) DUE DATE OF PAYMENTS UNDER PARAGRAPH (2).—Except to the extent provided by the Secretary, the amount which is required to be paid to the United States by the issuer shall be 'I paid in installments which are made at least once every 5 years. ' Each installment shall be in an amount which ensures that 90 percent of the amount described in paragraph (2) with respect to the issue at the time payment of such installment is required will have been paid to the United States. The last installment shall be made no later than 60 days after the day on which the last bond of the issue is redeemed and shall be in an amount sufficient to pay the remaining balance of the amount described in paragraph (2) with respect to such issue.

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"(4) SPECIAL RULES FOR APPLYING PARAGRAPH (2).—

"(A) IN GENERAL.—In determining the aggregate amount earned on nonpurpose investments for purposes of paragraph (2)—

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